Inspira Financial Completes Strategic Review of Loan Book; Establishes New Management and Board Structure

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Inspira Financial Inc. (TSX-V:LND) ("Inspira" or the "Company"), a company focused on providing lending, billing and collection solutions to the highly fragmented U.S. mental health and addiction services market, today announced it has completed its strategic review of its loan book. Additionally, the Company has established its new management structure with the appointment of several executives and the resignation of several members of the Board of Directors.

The strategic review of the loan book is complete. The Company has decided to retool its lending criteria by focusing on offering loans to borrowers who have strategic importance to the Company. Lending to strategic borrowers will increase gradually.  As a result, the Company expects the near term financial effects will be to reduce its current credit receivables balance, increase its cash on the balance sheet, and reduce revenues associated with lending. Revenues from the billing and collection business are expected to continue to grow over time.

The Company announced that Mike Olson has been promoted from Chief Financial Officer (CFO) to Chief Executive Officer (CEO) and Natalia Vakhitova is appointed interim CFO. Additionally, Dave Costine and Marc Lavine have resigned from the Board of Directors and Brian Chevalier-Jordan was appointed a non-executive Director. Edward Brann will continue in his role as a Director and chair the Committee for Corporate Strategy, which will work to create strategies to optimize the return on the Company’s large cash balance.

“This is an important step in our quest to realign this company with the capital markets,” said Edward Brann, Director of Inspira. “Today I can truly say that we have a new start. All of the officers and directors from a year ago are no longer with the Company. I want to welcome Brian to the Board as well as Natalia as our interim CFO. I believe this team has the renewed sense of urgency and focus that I have been working to establish in our new culture. I will be stepping into an investment banker role for the business and will put my energy toward finding additional ways to increase shareholder value. I think we are in a strong position. We have a good, albeit small, operation and a growing cash balance. I am optimistic about our current strategy and believe Mike and his team are the best option to expand on our lending, billing and collection business.”

“I see a high demand market for lending, billing and collection services in the U.S. addiction services industry,” said Mr. Olson, newly appointed CEO of Inspira. “I want to assure shareholders that we will be completing our audit shortly and I will remain focused on seeing it complete. Secondly, while it will take several quarters to optimize our technology platform and round out our implementation team, I am very optimistic about the growth prospects for this business line. While growth is a key goal, we will also work to ensure we have operational profits in mind as a priority. While this may reduce our ultimate growth rate in the short run, I believe in the current capital market environment a premium is placed on profits and I plan to ensure we have the opportunity to earn that premium.”

Mike OlsonMr. Olson was previously the CFO of a healthcare related startup, a Controller for PCH Treatment Centers and a Controller for a medical laboratory (which was successfully acquired by LabCorp). He began his finance career at The Walt Disney Company, holds a degree from Eastern Washington University, a graduate-level certificate from University of Washington and a California CPA license.

Brian Chevalier-JordanMr. Chevalier-Jordan has more than 20 years of experience in marketing and sales, the majority of which were spent in financial services. Since obtaining his MBA from UC Berkeley in 2006, Brian has held roles as Cisco, Financial Engines, and Yahoo!. For most of his career, Brian has focused on new product development and sales enablement.

Natalia VakhitovaMs. Vakhitova joined Inspira Financial in the finance department working directly with Mike Olson and the Board. She holds a degree in accounting from the Engineering Economic Academy in Russia. She has years of finance experience in the addiction treatment industry.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Inspira, Inspira expecting to reduce its current credit receivables balance, increasing its cash on the balance sheet reducing revenues associated with lending, and revenues from the billing and collection business continuing to grow over time, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Inspira's current views and intentions with respect to future events, and current information available to Inspira, and are subject to certain risks, uncertainties and assumptions, including: the success of Inspira's sales and marketing efforts effectively growing the total client base; Inspira's ability to satisfy and keep existing clients; management execution, hiring and maintaining qualified staff, and understanding and achieving software improvements within reasonable time frames and costs; the demand for addiction treatment continuing to increase; the new service line being complimentary to existing Inspira clients; Inspira being successful in its integration of the billing company; Inspira's clients maintaining revenue regardless of overall industry demand; the successful recruitment of employee talent in Florida; increasing total clients serviced resulting in a positive impact on revenue; and Inspira being able to use the scale of multiple clients and a larger operation to reduce costs. Material factors or assumptions were applied in providing forward-looking information. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include changes in law, competition, litigation, the ability to implement business strategies and pursue business opportunities, state of the capital markets, the availability of funds and resources to pursue operations, dependence on debt markets and interest rates, demand for the lending products Inspira offers at interest rates higher than at which Inspira can borrow, a novel business model, granting of permits and licenses in a highly regulated business, difficulty integrating newly acquired businesses (including the billing company), risks of performance by the target, new technologies, risk of billing irregularities by borrowers, low profit market segments, risks associated with the declaration and payment of dividends, including the discretion of Inspira's Board of Directors to declare dividends, as well as general economic, market and business conditions, as well as those risk factors discussed or referred to in Inspira's annual Management's Discussion and Analysis for the year ended February 29, 2016, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect Inspira in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Inspira does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and Inspira undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. Unless otherwise indicated, all figures are in Canadian dollars.

In addition to the foregoing, further litigation and administrative actions, even if completely without merit, can be expected to cause Inspira to continue to incur substantial financial expenses to defend its actions. In addition, the litigation may be expected to draw management resources that would otherwise be used to grow and manage the company, and have the effect of impairing or slowing the efforts of Inspira to execute on its business plan. Inspira can offer no guidance on whether or how long such proceedings will continue.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

Inspira Financial Inc.
Edward Brann
Director
1 [phone]
[e-mail]
www.inspirafin.ca